It never rains but it pours. There doesn t seem to be an end in sight to the woes of the public. They have received another solar plexus punch. Diesel, petrol and kerosene prices have shot up incredibly. This time around, the increase in diesel and petrol prices has been a whopping sum of thirty rupees each per litre. Kerosene price, too, has gone up by ten rupees per litre.
These mega fuel price hikes, due to both steep rise in the world oil prices and the mishandling of economy, are sure to have a domino effect. There will be another wave of all round price hikes of tsunami proportion. Private bus operators are already on the warpath demanding permission for an upward fare revision which will, no doubt, be used by them to fleece the public, through fare hikes disproportionate to the diesel price increase at issue.
The unprecedented world fuel prices could be traced to America s whimsical search for WMDs in Iraq and its fallout. The oil producing Muslim countries have refrained from meeting the world demand for oil and allowed prices to soar so as to let the US and its allies stew in their own juice. But, unfortunately, it is the small economies that have become the first casualty. Saudi Arabia has tried to contain the situation by stepping up its production but its efforts have not had the desired impact on the world market.
Iran, which the US is threatening to invade by way of availing itself of an escape route from Iraq, where it and its allies are getting bogged down by the day in what seems to be a never ending war, has refused to sell oil for dollars thus dealing a blow to the US currency. This has caused double trouble for the countries dependent on the US dollar. (When pachyderms clash, it is the grass that suffers!)
The economic cold war between the West and the Muslim world has so far sent crude oil price as high as 135 US dollars per barrel and the speculation is that it will reach 200 US dollars sooner or later. Should that happen, many an economy would collapse.
The high oil prices have also led to a world food crisis. The global North has taken to ethanol production haphazardly at the expense of food for humans and the bulk of corn produced in the US is said to end up in ethanol plants. Food sufficient for a child for one year is said to go into the production of fuel to fill the tank of one car! This has made the pro-poor activists in the developed world coin the slogan: We drive, they starve! An alternative to fossil fuel needs to be found but such ad hoc measures as the US and others have adopted in a hurry have produced disastrous results. The distance between democracy and anarchy is said to be a few meals and there are already food riots in several countries in Africa and Asia. The day may not be far off when they spread to other parts of the world, posing a threat to global democracy which the West is on a much advertised mission to protect, at times, through sheer military aggression.
Given the global situation, fuel price hikes were something to be expected. But, why on earth have there been such massive increases in this country? The LIOC first jacked up diesel prices last week by Rs. 20.00. It remained silent on petrol. Then came the CPC price hikes far in excess of the LIOC increases as regards diesel. This kind of difference between the CPC and LIOC price hikes is mind-boggling. Worse, the LIOC, which needed a hike of only Rs. 20.00 per litre of diesel will now get Rs. 30.00. It was well known that neither the CPC nor the LIOC had any complaints about the petrol prices as such. But, the price of regular petrol, too, has skyrocketed by Rs. 30.00 per litre.
An electricity tariff hike will be inevitable, unless the CPC supplies diesel at Rs 86.00 to the CEB for thermal power generation which stands at 68 per cent of the total power supply. We are paying for the sins of politicians, as former CEB Vice Chairman Neil Perera pointed out in this newspaper the other day. Quoting former Chief Engineer Generation Planning of the CEB Dr. Tilak Siyambalapitiya, Mr. Perera said that there would be no need to increase electricity prices and the prices would, in fact, be lower by 10 per cent, if both Norochcholai and Upper Kotmale plants were operational today.
Inefficient collection of direct taxes has been another reason for the government s increasing dependence on indirect taxes including those on fuel. It is unfortunate that all the people including the poorest of the poor are made to absorb the ill effects of indirect taxes such as soaring transport costs because of the lapses on the part of the State in the collection of revenue. Ironically, the super rich using luxury diesel vehicles pay Rs. 47.00 less for fuel per litre than the humble public using rickety cars operated on petrol at Rs. 157 per litre!
All our efforts to figure out how much profit the CPC was making after the price revisions at issue were in vain as neither the Minister of Petroleum Resources A. H. M. Fowzie nor anyone of his mandarins was available for comment. They had mysteriously disappeared. (Have they been abducted by aliens?) The Opposition and its shadow Cabinet were no better. None of the Opposition politicians could explain the situation. We only heard their usual rhetoric which was more obfuscating than enlightening.
The government owes an explanation to the public as to how fuel price revisions were calculated and what the profit margins are. Minister Fowzie and his officials must come out of hiding and face the people whose lives have been rendered more miserable by the mammoth fuel price hikes.
The wrath of the public knows no bounds!